Z Your answer is partially correct. ry again. Presented below are the comparative income and retained earnings statements for Sunland Inc. for the years 2017 and 2018. 2018 2017 $362,000 $297,000 Sales 198,000 Cost of sales 138,000 Gross profit 164,000 159,000 95,400 54,000 Expenses $68,600 $105,000 Net income Retained earnings (Jan. 1) $150,100 $71,600 Net 68,600 105,000 (26,500) Dividends 32,100 Retained earnings (Dec. 31) $186,600 $150,100 The following additional information is provided: 1. In 2018, Sunland Inc. decided to switch its depreciation method from sum-of-the-years digits to the straight-line method. The assets were purchased at the beginning of 2017 for $109,000 with an estimated useful life of 4 years and no salvage value. (The 2018 income statement contains depreciation expense of $32,700 on the assets purchased at the beginning of 2017.) 2. In 2018, the company discovered that the ending inventory for 2017 was overstated by $22,100; ending inventory for 2018 is connectly stated. Prepare the revised retained earnings statement for 2017 and 2018, assuming comparative statements. (Ignore income taxes.
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